Trust, Social Capital, and Networks: Informal and Semiformal Institutions at Work

Abstract

This chapter focuses on “trust” and cooperation in the Julfan trade network. It argues that the tendency to take “trust” in early modern merchant communities for granted, despite its central role in the lives of such communities, is one of the hallmarks of the trade diaspora paradigm. It considers trust as a commodity created by merchants largely through rigorous monitoring of merchant behavior, rewarding individuals upholding high ethical standards, and sanctioning those who break codes of honor and betray their fellow merchants. To explain the creation of “trust” and cooperation, this chapter relies on theoretical literature in economic sociology known as “social capital theory.” It investigates the creation and maintenance of “trust” in the Julfan network using a model that places emphasis on a centralized and centralizing semiformal legal institution in Julfa known as the Assembly of Merchants and to a lesser degree, the church and its network of priests. It embeds information flows within a detailed study of merchant correspondence and courier networks, which were vital to the proper functioning of the Julfan network.